Lack of lending fuels rent hikes in City Bowl

Rentals in the popular City Bowl area of Cape Town are escalating rapidly as strict bank lending protocols take the wind out of potential buyers’ sails.

So says Yazid Khan, letting agent for the Chas Everitt International franchise in the area, who notes that many of those keen to buy property in the City Bowl are having trouble qualifying for the home loans they would need.

The majority of those looking to live in the City Bowl are young, up-and-coming professionals who have either returned from the UK or are moving up in the world and wish to acquire their first major asset. Sometimes parents are also footing the bill for their student children who wish to live here. The area’s aesthetic appeal, lively nightlife, upmarket coffee shops, cafés and trendy retailers make it an obvious choice for this market.

However, he says, the properties these buyers would really like to purchase generally range in price from R1,2m to R2,5m, which is currently beyond their means. And so, rather than cut back on their lifestyle, many are renting instead in the hope that their financial situation will improve and they will be able to afford the properties they want at a later stage.

“As a result, the City Bowl rental market has been inundated and landlords can now pick and choose their tenants. Rental prices have also risen and even doubled in some instances – although they are still far lower than in areas such as Clifton and Camps Bay.

“Mandela Rhodes Place, Mutual Heights, The Adderley, The Studios, The Rockwell, Wembley Square, Icon, Harbour’s Edge, Flat Rock and Hip Hop Plaza are just some of the sought-after City Bowl addresses where rents have risen fast. One and two-bedroom apartments in these complexes now rent from R6000pm and R9000pm up, compared to a year ago when they were renting from R4000pm.

What is more, says Khan, tenants as well as landlords are currently favouring long- term leases, which suggests that they see rentals going even higher and wish to guard against sudden increases.

Article by: www.chaseveritt.com